Recent data shows that short selling balances have increased for certain stocks that have seen significant price surges. Despite rising stock prices, the expansion of short positions indicates that investors are anticipating future declines, complicating their calculations regarding these rapidly increasing stocks.
According to the Korea Exchange, as of August 19, the most recent tally, the net short selling balances for some stocks that experienced price increases compared to the end of last month have also risen.
In the KOSPI, Doosan Fuel Cell stood out with a notable increase. The stock price rose from 24,550 won at the end of last month to 39,800 won on August 19, marking a 62.1% increase. During the same period, the net short selling balance surged by 182.1%, from over 510,000 shares to 1,440,923 shares. The proportion of short selling balances relative to market capitalization also expanded from 0.78% to 2.20%, an increase of 1.42 percentage points.
Similarly, Isu Petasys saw its stock price rise from 74,500 won to 104,400 won, a 40.1% increase, with its net short selling balance increasing by 96.1%. Doosan Enerbility also experienced a 13.6% rise in stock price, while its short selling balance grew by 72.4%.
LG Electronics also reported increases in both stock price and short selling balances. The stock price rose from 162,100 won at the end of last month to 201,500 won on August 19, a 24.3% increase. During this period, the net short selling balance increased by 66.6%, and the proportion of short selling balances relative to market capitalization rose from 0.79% to 1.31%.
In the KOSDAQ, stocks that have recently surged also showed an increase in short selling balances.
Taesung's stock price jumped from 31,250 won at the end of last month to 51,900 won on August 19, a 66.1% increase. The net short selling balance rose by 49.5%, from 1,066,175 shares to 1,593,575 shares. The proportion of short selling balances also increased from 3.49% to 5.22%, a rise of 1.73 percentage points.
Robotics firm Roboteers saw its stock price increase from 183,800 won to 267,000 won, a 45.3% rise. Its net short selling balance grew by 39.7%, from 424,673 shares to 593,358 shares, with the balance proportion expanding from 2.90% to 4.05%.
Similarly, Clobot's stock price rose from 23,200 won to 30,850 won, a 33.0% increase. The net short selling balance increased by 74.1%, from 729,352 shares to 1,270,027 shares, with the balance proportion rising from 2.87% to 4.99%.
The increase in short selling balances may reflect the rising valuation due to stock price increases. However, these stocks have seen an actual increase in net short selling balances, and the proportion relative to market capitalization has also risen. This indicates that short positions have expanded even as stock prices have risen.
A securities industry official noted, "Typically, when stock prices rise sharply in a short period, investors may perceive limited potential for further increases, leading to an influx of short selling demand. However, an increase in short selling balances does not necessarily lead to a decline in stock prices, so it is essential to consider individual stock performance, valuations, and supply and demand factors as well."
According to Kang Song-cheol, a researcher at YuJin Investment & Securities, "Historically, after a surge in short selling, indices often rebound after a delay. If the short selling ratio does not spike again, it is possible that the peak of selling pressure has passed."
* This article has been translated by AI.
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